Dangote Cement announces 8.9% profit increase in 1Q12

Dangote Cement has released its financial results for 1Q12. The results reveal an 8.9% y/y increase in profit before tax, rising from N27.4 billion in 2011 to N31.6 billion in 2012. Operating profits grew 13.7% y/y to N31.6 billion whilst revenues rose by 17.6% y/y to N64.1 billion.

Commenting on the results, Chief Executive of Dangote Cement, D.V.G. Edwin, said: “The first quarter of 2012 saw our new capacity at Obajana and Ibese become operational and both plants are ramping up towards higher levels of production. The nationwide gas problems affected margins in the first quarter, but we expect some resolution of the problem in the summer that will enable us to achieve the much higher margins associated with gas-fired plant”. He went on to add that, “The significant investments we have made in Nigeria have helped the nation become self-sufficient in cement and we are confident that when local demand is satisfied, we will begin to export cement to neighbouring countries.”

Expansion

By 2015, Dangote Cement plans to expand its 10.25 million tpa Obajana plant by a further 3 million tpa and its new Ibese plant by 6 million tpa, as well as increasing capacity at its Gboko plant by 4 million tpa by mid-2012. The Group has also recently signed a memorandum of understanding for the construction of a 3 million tpa plant in Calabar, due to be built by 2015. Dangote aims to increase its overall capacity in Nigeria to 32.25 million tpa by 2015, and by 19 million tpa across Africa.

Plans for cement manufacturing plants are currently underway in Cameroon, Ethiopia, Gabon, Republic of Congo, Senegal, South Africa, Tanzania and Zambia, as well as import/packing facilities in Cote d’Ivoire, Ghana, Guinea, Liberia and Sierra Leone. The company is expected to convert some of its import terminals into export terminals as it expands into neighbouring markets.

Paul Maxwell-Cook’s Industry Insight looks at Nigeria’s burgeoning cement industry, its expansion plans both domestically and further afield, and the impact of Chinese investment. This article is an abridged version of the full article, which appeared in the May 2012 issue of World Cement.